A persistent lack of dollar demand continued to boost the performance of the shilling against the dollar on Tuesday.

Uganda shilling ends day marginally stronger than dollar

The Uganda shilling traded sideways versus its American counterpart on Tuesday ending the day marginally stronger.

Demand and supply factors remained the key drivers for the USD-UGX pair in yesterday’s session as fundamental developments took a backseat, resulting to subdued trading action for the pair.

Looking ahead, range bound trading looks set to continue in the near term with a bullish ting towards the local unit.

US Dollar rises towards three-week high

The U.S. dollar rose towards a three-week high on Tuesday as dampened hope that the Federal Reserve will ease monetary policy aggressively, while worry over U.S.- China trade tensions hitting corporate profits contributed to an equity sell-off on Wall Street.

Fed Chairman Jerome Powell is due to appear before Congress today and tomorrow for his semi-annual testimony, and is likely to be questioned about his willingness to ease policy.

The Euro was lower on Tuesday, confirming a three-day losing streak. Recent loses could be attributed to better than expected US data, as well as dismal German factory activity data released this week.

Meanwhile GBP/USD hit a six-month low before rebounding slightly to trade at 1.2470 levels, after U.K. retail sales fell 1.6% from a year earlier in June, adding to indications that the British economy is contracting.

The looming risk of a Hard Brexit, meanwhile, remains a background threat to the sterling, given that the two men vying to be Prime Minister have both indicated their willingness to risk that scenario.